LEOs have a fundamental problem
April 15, 2020
There was a telling comment made following OneWeb’s Chapter 11 announcement, and it concerns the all-important cost of user terminals. While rockets were being sent up by OneWeb and still are by SpaceX (a Starlink flight was scheduled for April 16th but is now delayed).
But Samer Halawi, now EVP/CCO at Intelsat and who worked at OneWeb in 2017, told trade magazine Space News that there was “no path toward” affordable and sub-$200 home user terminals. He justifiably argues that until there is an affordable home unit available then the prospects for these Low Earth Orbit (LEO) constellations to get a return on their huge investments are limited.
OneWeb has often spoken of providing broadband to all humanity. More recently it has revised that audience and targeting rural communities who would use a village or community centre as the main hub with re-transmission around the neighbourhood on WiFi. OneWeb has also targeted the In-Flight consumer as well as ships, governments and local authorities.
These LEO technologies are extremely sophisticated. They circle the Earth in 90-108 minutes (depending on orbital height). This fast transit over the sky needs a ground terminal to be able to track the satellite but instantly electronically adjusts to track the following space-craft in order to achieve constant connectivity. SpaceX, for example, was at one stage talking about a base station costing $1000 each, and they were hoping that mass-production would bring this down to nearer $300 each.
Some people argue that the LEO operators were looking to the cellular phone model, where a phone costs $600-$1000 but this is amortised over a 2 or 3-year contract and the client pays a simple monthly cost. But few isolated African or Asian individual potential users could afford the resulting $60-$70-$80 a month cost for a LEO subscription.
With OneWeb now navigating its bankruptcy ‘debtor in possession’ legal predicament, no doubt further information will emerge as to its own thoughts on how it planned to square this expensive circle.